“It’s the Economy Stupid!” – Economics of Painting Your Home

Many are aware of my background in institutional investment management services and years teaching at the graduate level for a major global university.  As a painting services provider, I continue to be absolutely astounded by consumers willing to focus primarily on “low or lowest price” as the main criteria for selecting a painter.  Failure to conduct a broader analysis is a substantive logical mistake.  You really need to consider more than initial pricing in your decision making.  Let’s take a quick look at the value proposition analysis and how this might be applied to selecting a painter for your home or business.

Created Scenario

A typical Central Floridian wants to get their home’s exterior painted. They obtain four estimates.  Low cost provider one bids $1,500, mid priced dude bids $3,000, double up bids $4,000 and OMG bids $6,000.  Paint is paint right?  With the exception of artistic quality, these will all look the same when the house is painted?  Gee… I don’t know.  I am suspicious of the low and high bidders.  I’ve heard we should throw these two out.  Guess the best deal is mid priced dude.  The second coat of finish paint is probably worth the extra price, but just can’t afford this option.  Done!  The consumer signs the mid priced contract and they are off to the races.

(Disclosure: The numbers, names and products here are fictitious.  This scenario is to help you understand how to make better decisions only. Any relationship to anyone is purely coincidental. No animals were harmed in the making of this scenario. Not an attorney. Not a doctor. No way! No how! Please consult a licensed and insured painter prior to attempting this on your own.)

Whoa!  You Just Made a Very Costly Mistake

Feeling great about the decision making and short-term financial gain but losing site of the total project is a critical error.  While there is no way to make you a decision making genius in a blog post, we are going to attempt to peel this onion.  It may be bitter sweet.  It might be hot.  However, you have got to expand your knowledge to gain wisdom. 

Here We Go……

The four components in this scenario have been kept simple.  They include: price, product, preparation and repaint cycle. We also assumed the consumer would select the same service level in subsequent repaints during the timeframe (hopefully after this brief lesson they won’t make the same mistake twice). The idea is to create a value proposition matrix which includes total cost over the full life-cycle of the decision.  Here’s how the data stacks up:

Bidder	Price	Product Quality	# of Coats Applied (3rd is seal or prime)	Preparation Quality	RePaint Cycle (Years)	Approx 15 Year Total Cost w/ Repaints (5% Inflation)
One	$1,500	Very High	1	Poor	3	$10,318
Mid-Priced	$3,000	Average	2	Good	5	$11,970
Double Up	$4,000	High	3	Better	8	$9,215
OMG!	$6,500	Very High	3	Best	13	$8,415

In the scenario above, you get 2 stars out of 4 for throwing out the low bidder.  This will not always work.  Change the criteria slightly for a hungry painter with high quality and you might have thrown out the deal of the day.  Not likely, but you should never default to throwing out the low bidder on price alone.

The real pain comes with the view of the two you kept.  Your decision making process was flawed and it just cost you well over $3,500. Both solutions are less than optimal. In fact, the one finish coat job from Mid Priced Dude selected is your most expensive option.  And … this doesn’t even account for the hassle of multiple repaints during the timeframe.  Yikes!  

This could get a lot worse! Given historical norms for economic recoveries, the 5% inflation number in this scenario is likely understated.  Some economists believe we could see double digit inflation in this cycle.  Imagine the difference here if inflation is higher. Yes, economics matter.  Do not ignore them.

Summary

Ok, the scenario is a bit stretched to prove a point.  Point is …don’t be stupid. You do not repaint your home frequently enough to fully understand the economics of painting.  It is a lot more complicated than price.  Make sure you are working with a professional that can fully explain these issues.  Most cannot.  If you have any doubts, call me.  I will try to help you even if you do not select ProTect Painters.  At least, you will be able to make a better informed decision about the investment on your project.

Quality that lasts typically requires a higher initial investment.  But …it’s frequently the optimal solution.  ProTect Painters of Oviedo ~ Winter Springs is the first choice provider for interior and exterior painting solutions throughout Central Florida.  Call us today for your free evaluation and detailed estimate.

Paint Prices Up Now, Homeowners Taking Own Action, Community Reserves Need Review, & Quality Painters in Demand

Last month’s blog post suggested a price increase coming for painting your home or business. Well, the price of paint is going up. Price increases just announced this week by several major companies are in the 5-15% range and staged with comments about more increases later this fall. ProTect Painters has national contracts and in most cases our clients will not see these increases until early next year. Get your home or business painted now to lock in the old prices.

HOA’s and Community Managers tell us they are sending “paint and fix your home now” notices to homeowners in record numbers. Many had put this activity on the back burner due to the economy. They are being forced to react by homeowners who are suing their neighbors directly and enjoining the HOA into the suit for failure to take action. Don’t take the risk and bear the expense of this process. It is cheaper to address these issues without litigation.

Communities with reserves for painting exteriors and common areas have put off these projects long enough and are requesting bids. Further deterioration of the property only adds to the cost and renovation. They need to act quickly to avoid sticker shock for material increases which were not contemplated and the expenses associated with any delays in the repaint cycle. It is highly unlikely these costs were included in their reserve studies. Assessments for painting which should have been included in owner’s reserves payments are never a great option.

Painting activity in the Central Florida area has exploded over the last 30 days with scheduling extending out and quality painting crews beginning to see demand rise. Pricing for labor is highly contingent on supply and demand. The price of high quality labor will rise with this tide and rise quickly. Act now before the best painters get picky about which contracts they take.

ProTect Painters of Oviedo ~ Winter Springs is available for consultation on home, business and community painting projects and issues.  Give me a call today at 407-542-6031 and let me know what we can do the help.  ProTect Painters, is our name.  Quality That Lasts, is our claim.